According to the market it is a done deal, with interest rate futures pricing in at least a 0.25% cut, with a further 0.75% expected over the next twelve months.

The green line on the chart represents the level at which the market has priced in a 100% certainty for a 0.25% cut in the rate tomorrow. Currently the red line is above the green line at 116% which means there is a small expectation that the rate cut could be higher.

Therefore, expect the Aussie dollar to potentially rise a bit tomorrow if there is only a 0.25% cut, or fall quite a bit more if there is a 0.50% cut.

This is because the FX markets should have already factored in at least a 0.25% cut. If the RBA does nothing, well, a sharp rally in the AUD would be almost guaranteed.